🔍 At a Glance
Supreme Industries isn’t just a plastic company — it’s THE plastic company. From PVC pipes to funky red plastic chairs in every Indian wedding, Supreme has quietly compounded for decades. But now, with resin price swings, infrastructure capex cycles, and rising competition from Astral, is the royalty under threat?
Let’s decode this polymer powerhouse. 🧪📈
📊 5-Year Financial Snapshot
| FY | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM % | ROCE % | EPS (₹) | Dividend Payout % |
|---|---|---|---|---|---|---|
| 2021 | 6,355 | 978 | 20% | 42% | 77.0 | 29% |
| 2022 | 7,773 | 968 | 16% | 35% | 76.2 | 31% |
| 2023 | 9,202 | 865 | 13% | 26% | 68.1 | 38% |
| 2024 | 10,134 | 1,070 | 15% | 29% | 84.2 | 36% |
| 2025 | 10,446 | 961 | 14% | 22% | 75.6 | 45% |
📌 Revenue CAGR: 13%
📌 PAT CAGR: 0% 🧯
📌 Margins Normalized after PVC boom in FY21
📌 ROCE Declining, but still elite
🧵 Segment Mix: What They Actually Sell
- Plastic Pipes (67%)
- Over 14,000 SKUs 🤯
- Impacted by volatile PVC resin prices
- Infra-led recovery expected in FY26
- Packaging (Cross-laminated films, Performance films)
- Used in industrial and consumer-grade wraps
- Moulded Furniture + Material Handling
- Yup, those wedding chairs again 🪑
- Steady cash cow business
- Protective Packaging & Industrial Components
- Niche, but growing faster
📉 Quarterly Trends: Choppy Margins, Steady Base
| Quarter | Sales (₹ Cr) | OPM % | Net Profit (₹ Cr) | EPS (₹) |
|---|---|---|---|---|
| Q1 FY25 | 2,636 | 15% | 273 | 21.52 |
| Q2 FY25 | 2,273 | 14% | 207 | 16.26 |
| Q3 FY25 | 2,510 | 12% | 187 | 14.72 |
| Q4 FY25 | 3,027 | 14% | 294 | 23.14 |
PVC resin fluctuations kept OPM swinging between 12–15%. Still, Supreme managed consistent profitability.
🔬 Balance Sheet Strength
| Metric | FY25 |
|---|---|
| Debt | ₹76 Cr |
| Cash & Inv | ₹720 Cr |
| Net Worth | ₹5,660 Cr |
| ROE | 17.1% |
✅ Almost debt-free
✅ Generating ₹1,000+ Cr CFO annually
📉 Capex: ₹800 Cr+ — focused on expansion
💸 Shareholding Pattern
| Holder | Mar 2023 | Mar 2025 |
|---|---|---|
| Promoters | 48.85% | 48.85% ✅ |
| FIIs | 18.1% | 22.9% 🔼 |
| DIIs | 17.9% | 13.2% 🔽 |
| Public | 15.1% | 14.9% 🔽 |
🧠 FII interest rising — despite high valuations
Retail participation falling (maybe priced out?)
⚖️ Valuation Check
| Metric | Value |
|---|---|
| CMP | ₹4,644 |
| EPS (TTM) | ₹75.6 |
| P/E | 61.4x 😵 |
| Book Value | ₹446 |
| P/B | 10.4x 🚨 |
| Div Yield | 0.73% |
Peer Compare:
- Astral: 81x PE
- Finolex: 31x PE
- Time Techno: 25x PE
- Sector median: 26x
👎 Supreme is priced like a tech stock, not a pipe company.
📈 Growth vs Valuation: Justified?
- Historical return: 5Y stock CAGR = 33%
- 3Y PAT growth: flat
- TTM profit down 11%
🚨 So why 60x PE?
Because markets trust quality + brand + market leadership
But… growth has slowed. Market may rerate if no earnings jump in FY26.
🧠 EduInvesting Fair Value Estimate
Method 1: PE Normalization
- Assume sustainable EPS = ₹85 (FY26)
- Apply fair PE = 30–35x
🎯 FV Range = ₹2,550 – ₹2,975
Method 2: DCF Proxy
- Avg Free Cash = ₹900 Cr
- Growth = 8–10%
- Terminal PE = 25x
🎯 FV Range = ₹2,400 – ₹3,000
✅ Final Fair Value Range = ₹2,400 – ₹3,000
CMP = ₹4,644 ❌
Overvalued by ~40–50% unless earnings double
🧠 TL;DR — The Plastics Are Still Supreme, But The Valuation Is Fantasy
✅ #1 in pipes
✅ Strong brand, diversified B2B + B2C
✅ Debt-free, dividend-friendly
❌ Margin compression risk
❌ PE bubble-level valuation
❌ Flat profits for 3 years
🤔 EduInvesting Verdict
Supreme is like the Ambani of Plastic — runs everything in its segment with swagger. But the stock right now? Priced like it’ll invent biodegradable plastic unicorns every year.
Unless earnings take off again, this is a hold-if-you-own, avoid-if-you-chase zone.
✍️ Written by Prashant | 📅 18 June 2025
Tags: Supreme Industries, Plastic Pipes, Astral, Infra Play, PVC, Moulded Furniture, ROCE King, EduInvesting Fair Value
